Quote:
Originally Posted by JackStroke
I don't believe that's accurate.
In the first month, you have 0 members to start.
Month 1: 100 sales = 100 Members End of Month (no rebills yet)
Month 2: 100 sales + 25 rebills from prior month (25% of 100) = 125 Members EOM
Month 3: 100 sales + 31 rebills from prior month (25% of 125) = 131 Members EOM
Month 4: 100 sales + 32 rebills from prior month (25% of 131) = 132 Members EOM
Month 5: 100 sales + 33 rebills from prior month (25% of 132) = 133 Members EOM
Month 6: 100 sales + 33 rebills from prior month (25% of 133) = 133 Members EOM
You can't rebill half a member, so under this scenario you are stuck at 133 members through infinity.
In the real world, these things are never as cut and dried obviously, but the fact remains that regardless of your rebill rate, if your initial sales stay stagnant as in this example, your total membership will reach a plateau and stay there.
Trying to increase the percentage of members who rebill each month is definitely a worthwhile goal, as it likely goes right to the bottom line, but increasing initial sales is crucial to a growing program.
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Your numbers show the exact same thing as mine.. it doesn't make a diff if I start with 0 or not, or if you include the .25's or not, but you can add those in, just round up.
I also did my math a bit different too, I split the 2nd month and afterwards, rather than a continual 25%..
Anyway, the point of all this was two things... the rebill % is under 50% and a site can still grow, even with my extreme example, with set numbers.. the site.. grew. A limit "appears" to be set because we FORCE the rebills to run out.. that wouldn't naturally happen even on the worst site, which is why I split.
If you figure in the 2% or lets just say 1 person per month that will never cancel. Then your math, grows again. That's why I had said, add a few % to the compounding rebill, and your site never dies, but that also happens naturally..
That isn't much different than what you said "Trying to increase the percentage of members who rebill each month is definitely a worthwhile goal"
Just 1 extra rebill can make ALL the difference in the world
